Eukaryotic organisms are made up of various cell types, each of which expresses a certain subset of specific genes. Since all cells basically inherit the same genetic information, there must be some regulatory mechanism which controls the expression of genes during differentiation. Recent experiments suggest that DNA methylation plays a role in this process since there is a correlation between gene activity and undermethylation in vivo and since enzymatic methylation inhibits the expression of several genes. The objective of this grant proposal is to understand the molecular modifications that occur during differentiation and to study the mechanisms by which methylation affects gene expression. Changes in the methylation pattern may be the result of either demethylation or de novo methylation. Demethylation can be studied by DNA mediated gene transfer into mouse L-cells. Teratocarcinoma cells will be used to study de novo methylation since DNA introduced into these cells undergo massive modification. One aspect of the work will concentrate on the development of techniques to prevent de novo methylation in embryonic cells since this may be essential for implanting active genes into animal cells. DNA methylation probably exerts its effect by inhibiting transcription. We will attempt to map the precise gene sites which are responsive to changes in methylation. The possibility that in vivo methylation affects chromosome conformation and DNA tertiary structure, such as Z-form DNA, will be studied using various nuclease probes.